Alabama Certificate of Need Requirements: Facility Guide

• Section 22-21-260 to Section 22-21-278

Alabama Administrative Code, State Health Planning and Development Agency, Chapter 410:

• Rule 410-1-2-.19

• The establishment of a new healthcare facility or health maintenance organization.
• Healthcare facilities that have annual capital expenditures of over $800,000 for operating expenses, $2 million for major medical equipment, or $4 million for any other capital expenditure. (Note: These limits are indexed annually for inflation.)
• Facilities that make any changes in their licensed bed capacity, either by adding new beds, or reallocating beds to other facilities.
• Facilities that offer certain new health services (e.g., health services provided through new equipment obtained from vendors).
• The acquisition and use of certain “major medical equipment.”

The CON review requirements do make exceptions for certain entities or services. Some examples include:

• Certain veteran nursing homes run by the Department of Veterans Affairs, not exceeding 150 beds.
• Private offices operated by licensed physicians, chiropractors, podiatrists, or dentists.
• The replacement of existing equipment as long as the previous equipment is no longer functional and the new equipment doesn’t expand current services.
• Acute care hospitals with less than 105 beds which are located more than 20 miles from the nearest acute healthcare facility.
• Any newly-offered health service provided by an acute care hospital which is classified as “rural” by the U.S. Bureau of Census.

• Data that demonstrates intended ventures render reasonable, relevant, and appropriate services.
• Evidence that the proposed service or service adjustments fit with the community needs and health-related plans.
• Information showing the potential for the proposal to also contribute to non-patient care objectives, like medical education efforts, teaching, and research.
• Evidence of review (as needed) by other state agencies where appropriate or necessary.
• Community input and feedback on the proposed new facility or program.
• A review of potential effects on existing healthcare facilities or programs.
• Statistics which reflect potential population growth and healthcare demands.

*Alabama CON requirements are stricter and more extensive than those in many other states. Please refer to the linked rules and regulations to determine the full requirements.

• The board reviews and awards CONs.
• The SHCC develops the Alabama State Health Plan, which assesses Alabama’s healthcare resources, and may identify where need exists. Their findings can assist providers applying for a CON to prove necessity.

• The standard fee is 1% of the proposal’s total, not to exceed $12,000.
• Other facilities with particular exemptions — such as a rural hospital where 30% of its daily census includes patients with Medicaid/Medicare coverage — may pay .75% of the total project cost, not to exceed $6,000.
• Additional fees may also be imposed as needed (to account for administrative filings, for example).

• A letter of intent (LOI), which must be submitted to the SHPDA at least 30 days before initiating the CON application, along with a $250 processing fee.
• As early as a day later, the SHPDA should notify the applicant and other affected parties (competitor health providers, for example), initiating the application cycle.
• The CON application must then be delivered within 16 days of the application cycle initiation along with the fee (detailed above). If competitors also filed LOIs, this application deadline and fee applies to them as well. SHPDA acceptance begins the review cycle, where applicants will be given deadlines to supply additional documentation if necessary, or appeal decisions once made.

If an applicant believes their proposed venture qualifies for a CON exclusion, they may submit a request for a letter of non-reviewability along with a non-refundable fee.

*For a complete view of the application process, please refer to the SHPDA flowchart that details each step with an easy to understand visual.

• A $1,000 fee for a non-rural healthcare provider, and a $500 fee for a small or rural provider.
• A $100/day penalty ($50/day for rural and small providers) from the start of delinquency until filing, to be capped at $10,000 or $5,000 for small and rural providers.

Healthcare providers who are not compliant with the CON review process may be disqualified from participating in the process either as a CON applicant, or as an opponent to a CON application.